Asian indices closed a mixed bag today while Europe is trading in the positive currently. The rupee was placed at Rs 54.70 to the dollar at the time of writing.

India's nodal agency for Rajiv Ganghi Grameen Vidyutikaran Yojana (RGGVY), Rural Electrification Corporation (REC), was earlier keen to set up a new bank. This was meant to be in collaboration with Power Finance Corporation (PFC) and IFCI. However the rural power financer has decided not to apply for a license.

Despite high interest rates, and a slowdown in infrastructure activity, especially in the power space, REC saw its loan book grow by 24% YoY in 1HFY13. Sanctions saw a comeback and increased by 51% YoY in 1HFY13. REC had 0.44% gross NPA levels at the end of 1HFY13; this is an increase from 0.30% levels seen in 1HFY12. As per the management, the company will try and maintain its asset quality as the Ministry of Power is building up pressure on various state governments in order to increase state electricity boards (SEBs) tariffs. This along with the bailout plan by the banks and state governments will help them meet their loan obligations. However, even in a high interest rate environment, REC is well equipped to manage NIMs and spreads, on account of its overseas borrowings and through low cost bonds.

Meanwhile, Jagran Prakashan (JPL) has received board's approval to raise up to Rs 1.5 bn through issue of securities to augment its resources as well as to retire debt. The company's board has approved issue of secured non-convertible debentures up to an aggregate value of Rs 1.5 bn to augment its long-term resources and retire its high interest bearing short-term debt.